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| 8-K - 8-K - Bristow Group Inc | d897216d8k.htm |
 Scotia Howard Weil 43
Annual Energy Conference
Bristow Group Inc.
March 22 –
26, 2015
Exhibit 99.1
rd |
 2
Forward-looking statements
This presentation may contain “forward-looking statements” within the meaning of the
Private Securities Litigation Reform Act of 1995. Forward-looking statements include
statements about our future business, operations, capital expenditures, fleet composition, capabilities and
results; modeling information, earnings and adjusted earnings growth guidance, expected operating
margins, cash flow stability and other financial projections; future dividends, share
repurchases and other uses of excess cash; plans, strategies and objectives of our management,
including our plans and strategies to grow earnings and our business, our general strategy going
forward, our business model and our operational excellence initiative; expected actions by us
and by third parties, including our customers, competitors and regulators; impact of grounding
and the effects thereof; the valuation of our company and its valuation relative to relevant financial indices; assumptions underlying
or relating to any of the foregoing, including assumptions regarding factors impacting our business,
financial results and industry; aircraft delivery dates and other matters. Our
forward-looking statements reflect our views and assumptions on the date of this presentation regarding
future events and operating performance. They involve known and unknown risks, uncertainties and other
factors, many of which may be beyond our control, that may cause actual results to differ
materially from any future results, performance or achievements expressed or implied by the
forward-looking statements. These risks, uncertainties and other factors include fluctuations in the demand for our services;
fluctuations in worldwide prices of and demand for natural gas and oil; fluctuations in levels of
natural gas and oil exploration, development and production activities; the impact of
competition; actions by customers; the risk of reductions in spending on aircraft services by
governmental agencies; changes in tax and other laws and regulations; changes in foreign exchange
rates and controls; risks associated with international operations; operating risks inherent in
our business, including the possibility of declining safety performance; general economic
conditions including the capital and credit markets; our ability to obtain financing; the possibility
that we may lack sufficient liquidity to continue to repurchase shares or pay a quarterly
dividend; the risk of grounding of segments of our fleet for extended periods of time or indefinitely; our
ability to re-deploy our aircraft to regions with greater demand; our ability to acquire
additional aircraft and dispose of older aircraft through sales into the aftermarket; the
possibility that we or our suppliers will be unable to deliver new aircraft on time or on budget; the possibility that
we do not achieve the anticipated benefit of our fleet investment program; availability of employees;
political instability, war or acts of terrorism in any of the countries where we operate; and
those discussed under the captions “Risk Factors” and “Management’s Discussion and Analysis
of Financial Condition and Results of Operations” in our Annual Report on Form
10-K for the fiscal year ended March 31, 2014 and our Quarterly Report on Form 10-Q for
the quarter ended December 31, 2014. We do not undertake any obligation, other than as required by law,
to update or revise any forward-looking statements, whether as a result of new information, future
events or otherwise. |
 Who
we are: Bristow is a differentiated investment in oilfield services
•
Ticker:
BRS;
stock
price
of
$58.74/share with a market cap ~$2.0
billion
•
369 aircraft in ~20 countries with
~4,800 employees
•
Rated “Investment Grade”
by
Standard & Poor’s
•
Quarterly dividend of $0.32/share
(historic growth ~30% annually)
•
Bristow recently increased our fixed
wing presence with Australia’s
Airnorth regional airline
1)
Based on stock price as of March 13, 2015.
2)
As of December 31, 2014.
3)
Standard
&
Poor’s
secured
rating
is
BBB-
with
an
unsecured
rating
of
BB-
as
of
December
31,
2014.
Bristow transports crews for oil
and gas companies and provides
search and rescue (SAR) services
for them and governments alike
3
1
2
3 |
 Who
we are: Bristow’s Target Zero safety culture
BRISTOW AIR ACCIDENT RATE*
PER 100,000 FLIGHT HOURS
*includes commercial operations only
0
YTD FY15
4
•
Industry-leading Target Zero safety
program since 2006
•
Our current safety programs have
been enhanced through:
Internal focus, transitioning from
lagging safety indicators to
leading indicators
Formation of HeliOffshore,
beginning an industry-wide
collaborative program to improve
safety that is having immediate
positive impacts
0.54
0.53
0.53
0.96
0.00
FY10
FY11
FY12
FY13
FY14 |
 5
Who we are:
Service to the entire energy value chain, especially production
Typical revenues by segment
Other
10%
Production
60%
Development
10%
Exploration
20%
•
Largest share of revenues (>60%) relates to
oil
and
gas
production
and growth opportunities
•
There
are
~8,000
offshore
production
installations worldwide —
compared with >600
exploratory drilling rigs
•
~1,700 helicopters are servicing the worldwide
oil
and
gas
industry,
of
which
,
providing stability
Bristow’s fleet
•
Bristow revenues are primarily driven by our
clients’
operating expenses
is approximately one-third
|
 Who
we are: Bristow’s contract structure generates predictable cash
flow •
Two-tiered contract structure includes both:
Fixed monthly standing charge
Variable fees based on hours flown with
•
Bristow oil and gas contracts earn on average 65% of revenue not
dependent on utilization
•
UK SAR contract earns 85% of revenue not dependent on utilization
Revenue sources
Operating income
6
Variable hourly
30%
Variable hourly
35%
Fixed monthly
70%
Fixed monthly
65%
to reserve helicopter capacity
fuel pass-through |
 What
we are doing now: Bristow market perspectives and plans
•
Clients are continuing a three-phase response in this
downturn: retrenching, recalibration and (eventually) renewal
•
The strength of the U.S. dollar continues to impact Bristow’s financial
results more than the decline in oil prices
•
Although production-oriented services (like aviation) are doing better than
many in energy services, available aircraft capacity is increasing
•
Experiencing some reduction in flight hours with minimal idle aircraft in
FY15. In FY16, we are expecting some reduced aircraft per contract
with a few project cancellations, leading to reduced activity and an
increase in supply of available aircraft. •
Bristow
is
executing
on
specific
plans
during
this
downturn
to
reduce
costs
Finalize internal restructurings put in place in Q2 FY15
Proactively work with clients to find efficiencies and ways to reduce costs,
without compromising safety
Partner
with
original
equipment
manufacturers
(OEMs)
and
lessors
during
this
downturn to find cost and capital efficiencies
7 |
 16-point efficiency program that responds to our
clients’
demands for cost reductions
Our global footprint incentivizes better aircraft utilization for
our clients
Value Chain
Workshop
Targeted working sessions with clients generate ideas
that lead to efficiency and cost reductions
Other Services: Fixed
Wing, Logistics, End
to End
Examples
Transportation between airports and our bases is a logical
service extension –
many clients are requesting this as
they refocus on their core business
Aircraft
optionality
to
optimize
our
clients’
passenger
capacity needs and accelerate our fleet rationalization
Alternative
Helicopter Types
What we are doing now:
Specific initiatives to help our clients
8
Volume
Incentives |
 What
we are doing now: Cost management execution to weather this downturn
$10-$20M
cost
reductions in
FY16
Capex
efficiency
and
deferment
We have already executed several initiatives including:
•
Other International Business Unit elimination to better align
our commercial operations and reduce G & A costs
•
Global heavy maintenance and supply chain restructuring to
enhance asset utilization and inventory management
Additional
cost
reductions in
FY16
We are achieving more cost reductions:
•
Labor and maintenance cost with focus on productivity
•
G & A and discretionary spend freezes
•
Supplier and OEM partner efficiencies
Our balance sheet strength provides us with Capex flexibility:
•
Capex deferral of 25% –
40% year-over-year
•
Supplier and OEM partners are being helpful
•
Inventory reduction with a mostly owned fleet
9 |
 10
56
Building long term value:
199 qualified aircraft opportunities over the next three years
30
56
7
Global aircraft
opportunities
North America
South America
and Caribbean
Europe
Gulf of Guinea
E. Africa, M. East
and Central Asia
Australia and
Southeast Asia
Russia
Data as of February 28, 2015
9
19
6
5
8
8
4
36
7
27
27
33
10
118
81
Medium
Large |
 199 qualified aircraft opportunities
104 realistic aircraft
opportunities
Data as of February 28, 2015
26 orders*
39 options
*Oil and gas orders and options as of December 31, 2014
Building long term value:
Order book management from our qualified opportunities
31 high probability opportunities
for new contracts
11
•
Bristow uses specific opportunities
to create our order book
with total
opportunities condensed to 104
realistic bids
•
31 high probability opportunities
for new contracts are derived from a
view that we have a ~33% new bid
success rate
•
Our confidence in future growth is
matched by the high percentage of
orders (26) vs. high probability
opportunities (31)
•
The current order book has been
reduced
with recent deliveries,
although Bristow will look to increase
our order book with a large airline-
like order |
 Building long term value:
UK SAR provides stable, diversified cash flows
UK SAR
Q1
Q2
Q3
Q4
FY16
GAP SAR
Total FY16
Cumulative LACE
4
8
10
14
14
4
18
Quarterly EBITDAR ($M)
$7 -
$9
$14 -
$17
$20 -
$23
$29 -
$31
$70 -
$80
$15 -
$25
$85 -
$105
UK SAR -
FY16
12
•
Long-term, stable cash flow provides diversification with energy
franchise •
Four
LACE
operating
under
GAP
SAR
contract
expected
to
provide
~
$15
-
$25M
in EBITDAR in FY16
•
UK SAR contract expected to commence April 1, 2015 with four aircraft beginning
revenue service; 14 aircraft expected to be on revenue service by the end of
FY16 |
 Building long term value:
Bristow’s H175 order includes innovative lifecycle support
13
•
The H175 range, cruise speed and cost per passenger-mile are highly
desirable for our customers operating with certain capacity requirements
•
Airbus Helicopters is providing a comprehensive airline-style support
agreement, through which availability risk is shared for the entire lifecycle
•
The H175 aircraft deliveries are spread over a number of years, with cash
outflows largely deferred for several years |
 14
Building long term value:
Fixed wing creates point-to-point logistics solutions
•
Through acquisitions of Eastern Airways and Airnorth, Bristow has continued
to increase its ability to offer clients point-to-point logistics
solutions •
Point-to-point logistics provide our clients with a more complete and
efficient level of service than when contracting rotary and fixed wing
separately •
Both Eastern Airways and Airnorth operate both charter and scheduled
services that serve energy clients in key cities with limited alternative fixed
wing presence |
 Building long term value:
AW609 is the next step in point-to-point logistics solutions
•
The AW609 creates point-to-point logistics solutions for clients in one
airframe •
The aircraft is being developed based on existing military tilt rotor technology,
but with additional capabilities such as a pressurized cabin
•
Bristow will collaborate with AgustaWestland to develop AW609 configurations
and capabilities, as it is a natural fit for air medevac, pilot and engineer
15
vertical lift training, and crew change in hostile environments
|
 Building long term value:
A strong balance sheet is critical during this downturn
Bristow’s strong balance sheet and diversified cash flows
provide flexibility to weather downturn and emerge stronger
•
Preference for mostly owned fleet makes cost management and
growth easier during a downturn
•
Opportunistically pursue accretive M&A as well as other growth
investments in advantageous environment
Bristow is committed to returning capital to shareholders
through this downturn
•
Maintain commitment to the dividend and future dividend growth
•
Careful execution of share repurchases in light of the opportunity
set and needed support for our clients
16 |
 We
are Bristow 17 |
 Bristow Group Inc. (NYSE: BRS)
2103 City West Blvd., 4
Floor
Houston, Texas 77042
t
713.267.7600
f
713.267.7620
bristowgroup.com
Contact us
18
th |